On the occasion of Pension Awareness Week 2021 (September 13-17), a new study will be published, which is supported by the government MoneyHelper found that 12 million Generation Xers are unclear about how much money they will need in retirement.
Ahead of Wednesday’s Pension Awareness Day, more than 2,000 British adults aged 40 to 55 were asked to take stock of their hopes for retirement. For those planning to retire, the pandemic has meant four in 10 (41%) have reassessed their priorities for retirement, e.g. B. How they will spend their income.
Almost a third (33%) of Generation X would like to give socializing priority over “big tickets” and experiences like holidays. Over two-thirds (73%) said that time with family and friends is more important to them now, while 55% make more conscious effort to get in touch with loved ones.
Visits to the sea, dining in restaurants, gardening and entertainment at home are the “simple pleasures” that the generation looks forward to in the years after their working life.
However, twelve million Gen Xers (88%) have not calculated how much they will need to live in retirement, and less than a third (29%) have considered the cost of socialization at this stage of their life.
The simple joys that Gen Xs look forward to most in retirement are:
- A trip to the sea (42%)
- A meal in a nearby restaurant (34%)
- A coffee with friends (33%)
- Gardening (32%)
- Entertaining family and friends at home (28%)
- A drink in their local pub (24%)
While respondents were most likely to say they dine out once a week, had a coffee with friends, and had a drink in the pub, they might not be able to afford these things as often as they’d like on the way to one “moderate” pension standard. The recommended “moderate retirement” budget for eating out is £ 900 a year, but Gen X would need £ 1,013 to enjoy the social life they want in retirement – and possibly six weeks of food or the equivalent of 33 cut coffee or nine diner meals.
Research from the International Longevity Center has shown that only 7% of Generation X with a defined contribution pension are saving enough to lead a moderate lifestyle in retirement. This means some could face watered down retirement.
The results show that four in ten (39%) 40- to 55-year-olds are negatively affected by the economic downturn and the effects of Covid-19. More than a quarter (27%) said their retirement pot is likely to be smaller due to leave or layoff during the pandemic, while 27% also said they will have to retire later due to the financial impact of Covid-19.
Carolyn Jones, Pension Expert at Money and Pensions Service, said: “Enjoying the little joys in life, like meeting friends over coffee, has become more special than ever in the last few months. But our research has produced a less-than-palatable truth that many of those currently saving for retirement may have to cut back on their expected lifestyles.
“It is important that it is not too late to take action – and that you do not have to overstate your pension contributions to get back on track. There are simple steps you can take to increase your retirement age such as visiting the MoneyHelper Couch to Financial Fitness website and trying our retirement “money milestone” or speaking with our retirement specialists.
“It might seem daunting to think about how much income you need in retirement, but help is free and you will be surprised that you are closer to the retirement you want than you think, or that there are some simple steps you can take now to take To help you get there. With help during this retirement awareness week, you can literally let your efforts fade away when you reach retirement. ”
MoneyHelper offers the following top tips on how to start planning your retirement:
- Try couch to financial fitness . ‘Couch to Financial Fitness’, available on the MoneyHelper website, trains people to improve their financial wellbeing week after week, whether they are beginners or are back on track, as well as their physical or mental health. There is a dedicated pension page to help you plan your desired retirement savings.
- Find your pension pot (s) and check their value. With the average person who has 11 jobs in their lifetime, it’s easy to lose track of the pensions you may have had in the past. If you think you’ve lost a company pension plan, the first thing to do is check with your previous employer or contact the provider if you remember the name. If you can’t find details on either, you can contact the government’s Pensions Tracing Service. Once you’ve tracked down your pots, you can check your bank statements or ask your system or provider for an up-to-date assessment of your savings.
- Think about your cost of living in retirement. Budget your expected income and expenses as early as possible to gain more control over your situation. MoneyHelper has a free one Budget planner tool to help you plan.
- Think about the age at which you want to retire and when you want to access your retirement savings. For some people, it doesn’t have to be at the same time. Some people may already have set a retirement age with their provider, but if your circumstances have changed and you are planning to retire sooner or later, you may want to reconsider how your savings are managed to make sure your money is getting working hard for you. It is helpful to also check your retirement income with MoneyHelper Pension calculator if you go through any changes.
This week is Pension Awareness Week, an annual campaign run by Pension Geeks with support from the Department of Work and Pensions (DWP). Retirement Awareness Day itself falls on September 15th and is intended to inspire people to make the most of their retirement.
The government-sponsored MoneyHelper is a new one-stop shop that offers free advice on money and pensions by phone, online, and in person. It also points to competent and free debt counseling if this is needed. It bundles the services previously provided by Money Advice Service, The Pensions Advisory Service and Pension Wise.
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